Correlation Between First Majestic and New Age
Can any of the company-specific risk be diversified away by investing in both First Majestic and New Age at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining First Majestic and New Age into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Majestic Silver and New Age Metals, you can compare the effects of market volatilities on First Majestic and New Age and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in First Majestic with a short position of New Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Majestic and New Age.
Diversification Opportunities for First Majestic and New Age
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and New is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding First Majestic Silver and New Age Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Age Metals and First Majestic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on First Majestic Silver are associated (or correlated) with New Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Age Metals has no effect on the direction of First Majestic i.e., First Majestic and New Age go up and down completely randomly.
Pair Corralation between First Majestic and New Age
Assuming the 90 days horizon First Majestic Silver is expected to generate 0.36 times more return on investment than New Age. However, First Majestic Silver is 2.76 times less risky than New Age. It trades about 0.05 of its potential returns per unit of risk. New Age Metals is currently generating about 0.02 per unit of risk. If you would invest 676.00 in First Majestic Silver on August 29, 2024 and sell it today you would earn a total of 185.00 from holding First Majestic Silver or generate 27.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Majestic Silver vs. New Age Metals
Performance |
| Timeline |
| First Majestic Silver |
| New Age Metals |
First Majestic and New Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Majestic and New Age
The main advantage of trading using opposite First Majestic and New Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Majestic position performs unexpectedly, New Age can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in New Age will offset losses from the drop in New Age's long position.| First Majestic vs. Talon Metals Corp | First Majestic vs. Champion Gaming Group | First Majestic vs. SalesforceCom CDR | First Majestic vs. Gfl Environmental Holdings |
| New Age vs. Stillwater Critical Minerals | New Age vs. Grid Metals Corp | New Age vs. Kore Mining | New Age vs. Imagine Lithium |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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